The Army learned its lesson on no-bid contract in Iraq

In 2001, Kellogg, Brown & Root, a subsidiary of Halliburton, won a
competitively bid contract to supply logistical support for U.S.
troops, wherever they went. At the beginning of the Iraq War, the
contract was extended, enlarged and redefined as a no-bid contract. In
retrospect, that was a big mistake, which the Pentagon has finally
realized.

Last week, the Army announced it would re-bid the contract under
which KBR has been providing services to troops. Asked why the no-bid
contract was being discontinued, an Army spokesman said it part of the
"lessons learned" process.

The KBR contract has long been a target of criticism in Congress, in
part because Vice President Dick Cheney used to run Halliburton, and in
part because there has been a steady stream of allegations of fraud,
overpricing, and other abuses, which the company of course has
denied.

Following the announcement that the Army would re-bid the contract,
Byron Dorgan, D-N.D., said, "It has taken them far too long. I believe
hundreds of millions, probably billions, of dollars have been wasted."
Dorgan held up a hand towel that he said cost double what it should
have cost because KBR wanted its logo embroidered on towels intended
for the troops.

The Washington Post reported last week that KBR was paid $7 billion
under its no-bid contract last year, and is expected to be paid between
$4 billion and $5 billion this year.

In the heat of war, there may be sound reasons to award
non-competing, no-bid, cost-plus contracts to industry giants - to
those with a track record of being able to deliver in a harsh
environment - but prolonging such contracts, year by year, carries a
risk. Anything less than open competition raises questions about the
integrity of the process. It especially raises questions when there are
eyebrow-raising political connections.

On KBR's no-bid contract, the Army says it has learned its lessons.
Has the Pentagon? Has the administration?